New $568m hotel to be built at Burswood

Courtney Trenwith

The state government will support hundreds of new gambling machines for Perth's Crown Casino to help fund a new 500-bed, six-star hotel on the Burswood peninsula.

Premier Colin Barnett today acknowledged that he would be scrutinised for the decision not to oppose 500 new gaming machines and 130 additional gaming tables at the Crown Metropol, formerly the Burswood Casino, which will be subject to the approval of the Gaming and Wagering Commission of Western Australia.

The hotel will be built on 5.6 hectares of land, to be purchased by Crown from the state government for $60 million.

Crown will pay the government $60 million for 5.6 hectares of land adjacent to the Burswood Entertainment Complex and presently housing a car park and several golf course holes.

The city's new sports stadium is planned to be built at the other end of the golf course, near the Causeway. Mr Barnett confirmed the developments meant the end of the course.

Mr Barnett said the land to be sold to Crown had been valued at $90 million but at least $30 million would be needed to remediate the former tip site.

"$60 million for the sale of what is essentially a car park is a good result," he said.

"This is a major project for which the state government has not had to pay anything."

Construction of the hotel is expected to begin next year and be completed by mid-2016.

However, Mr Felstead said building would not begin without approval for the new gambling machines.

"It's obviously critical in terms of we need to pay for the hotel," he said.

"But what's important is this is phased in over five years."

Mr Felstead said the number of gaming machines at the casino had grown from 1200 in 2004 to 1800, although the licence is for 2000. During that same period visitor numbers had increased from 4 million to 7 million.

"By [2016] we expect we'll be getting close to 10 million visitors a year," he said.

Mr Barnett said the number of gaming machines had grown in line with the increase in visitor numbers and Perht's population.

Mr Felstead would not speculate on the room rate for the new hotel but presently a five-star hotel in Perth CBD is worth more than $1000 per night.

Mr Barnett said the hotel would create 700 jobs during construction and an addition 500 ongoing jobs in the hotel once it was operational.

He expected the hotel to generate an extra $60 million in tourism expenditure in the state annually, bringing in 79,000 extra visitors. As well, it would create $52 million in additional gaming taxes, $5 million in other taxes and Burswood would contribute an extra $3 million towards maintenance of the peninsula.

"This is a very important project for Perth ... and of immense importance to tourism," Mr Barnett said.

The last five-star hotel was built in Perth 25 years ago.

"That's been the biggest problem for the tourism industry, [the] shortage of rooms," Mr Barnett said.

"And what rooms are there have been taken up by business, so tourists have been to some extent crowded out. This will help alleviate that problem."

Tourism Minister Kim Hames said the hotel would contribute a "big chunk out of the beds we need" to meet increasing accommodation demands.

The Australian Hotel Association chief executive Bradley Woods said the additional rooms and facilities were a welcomed addition to the industry in Perth.

"The accommodation hotel industry in Western Australia offers some very good commercial opportunities," he said.

"With well known high occupancy rates in the Perth CBD this is a welcome announcement from the state government and Crown."

Chamber of Commerce and Industry WA chief executive James Pearson said the state's first six-star hotel would provide a new level of service for visitors as well as career pathways for hospitality workers.

"More premium hotel beds will also increase the ability for Perth to hold major conferences and events, an important part of promoting investment and tourism," he said.

"The announcement of new hotel sites across the CBD is good news for business travellers and visitors. However most will take some time before they are ready and it's important there is a mix of accommodation options available to meet the needs of tourists."

In total, Crown would have invested more than $2.2 billion in development at the Burswood site since its acquisition in 2004.